Your trustee would need to agree to any sale before the end of your trust deed, so you really need to speak it through with them. It should certainly be possible to sell the property and include the shortfall in your trust deed, though your trustee may look for you to make extra payments in order to ensure that your other creditors are not prejudiced by this change of plan.

thanks for replying Kevin
could you clarify if that would be the case if i sold after finishing my 36 months, would it need to be agreed before end of 36 months

sorry just read the reply correctly so you have said it is possible if i contact my trustee before completion of the trust deed ,

so what would happen if i sold after the trust deed had finished without paying the £500 that's being asked for would that me no equity = nothing to trustee. leaving the negative equity to be paid back to the bank.

Hi no2debt.

I think you need to clarify the position regarding the £500.

Sometimes it's an optional thing that people can choose to take up or not.

Sometimes we've heard from people that had actually formally agreed to pay this at the start of the trust deed, so it wasn't optional and had become a part of the agreement.

As trust deed assistant says, you might not be discharged from your trust deed until you have paid the £500.
If you wish to sell the property and include any shortfall in the trust deed then the trustee may actually seek more than £500 from you in the form of additional contribution payments so that your creditors can still expect the same return despite the extra debt being added in.

Thanks TDA im going to have the £500 paid and will save after Td to build equity i think It may take me a while but I will feel like ive done the right thing. And it also means i will have kept my promise to myself of no more debt.

Thanks so much for your advice both kevin and TDA

On the basis of what you say, hopefully the trust deed can be discharged and you can then deal with the property.

I'm sure the mortgage company would agree to a sale less than the mortgage on the basis that its not too big a sum and you make arrangements to clear any shortfall.

Mark

Though technically there is no reason to pay off any shortfall - the trust deed discharges you from liability for all debts. It does not prevent a mortgage lender realising their security, but once this has been done then legally speaking you have no further obligation to pay any shortfall.

Thanks both Kevin and Mark,

Kevin would the trust deed still protect me from a shortfall if I sold after the discharge from my TD even if I hadnt discussed it with the trustee previously
And
Is realising their security another term for repossestion or just another expression for when a house is sold .

I think there may be a problem after the trustee is discharged and then the property is sold as this could not be a claim in the trust deed as all dividends would be paid.

The options are to proceed as above before discharge and the shortfall would be a claim or proceed and agree a repayment after discharge. In truth, you could hand the keys back to the trustee and accelerate your move abroad. That way the trustee would be unable to discharge himself until the property had been dealt with.

Mark

Im going to give my TD a call tommorow to see where i can go from here based on the points you have put forwards Im very greatfull to you all thanks very much.

No problem,

Always glad to help. Let us know how you get on.

Mark

Could the property be surrendered to the secured creditor prior to completion of the TD? This will put the onus on them to sell it, and the TD may be required to remain open until the property is sold in order to ingather any surplus funds or an unsecured claim for the shortfall. The trustee could offer to sell the property for a small fee, in order to achieve a better price than the lender. This would allow everything to be dealt with in the TD, allowing you to move on afterwards, and you have already written off the chances of there being surplus equity anyway.

It shouldn't make any difference whether the property is sold before or after the end of the trust deed - the mortgage lender can value their security and make a claim for any estimated shortfall whilst the trust deed is still open if they want to.

Sorry if this is turning a bit technical, no2debt. The main point to remember is that you cannot legally be pursued for a debt which existed prior to the signing of the trust deed - all the mortgage lender can do is repossess the property as their security is unaffected.